With Revised 2020 Budget Passed, What Next?
After weeks of interfacing with the Executive, the National Assembly, last week, passed the Revised 2020 Budget, Deji Elumoye and Udora Orizu Report
For more than two months now, the Executive had used every available opportunity to intimate the legislative arm with the need to review the 2020 federal budget in view of the adverse effect of COVID-19 pandemic on the nation’s economy.
Minister of Finance, Budget and National Planning, Zainab Ahmed, has had cause to lead other top government officials to meet with the leadership of the National Assembly to explain the need for a review of the budget in the light of the cut in the international market price of crude oil from $57 per barrel to less than $30 per barrel.
She also informed that government had planned to vote N500billion as Intervention Fund to cushion the effect of COVID-19 pandemic on the citizenry.
Both the President of the Senate, who also doubles as the Chairman of the National Assembly as well as the Speaker of House of Representatives and Vice Chairman of the National Assembly, Hon Femi Gbajabiamila, at every meeting with the Finance Minister on the budget review, assured the Executive of their readiness to fast track the passage of the budget bill once presented to the parliament.
Although it took sometime before the revised budget was collated, the revised 2020 Appropriation Bill was eventually laid before the two chambers three weeks ago.
With the bill before the Assembly, all the Senators and House members were recalled from their recess through a letter from the Clerk, Mohammed Sani-Omolori, asking them to consider the 2020 Appropriation (Amendment) Bill.
The one-page letter dated Tuesday, May 26, read in part: ‘’This is to inform all Distinguished Senators and Honourable Members that resumption of Plenary Session earlier scheduled for Tuesday, 2nd June, 2020 has been rescheduled to Thursday, 28 May, 2020 to enable members consider the Appropriation (Amendment) bill, 2020.
‘’All Distinguished Senators and Honourable Members are expected to resume in Plenary by 10.00am on Thursday, 28th May, 2020, please.’’
Immediately the bill was laid in the two chambers on May 28, the leadership of the National Assembly ensured that the bill was referred to appropriate committees for further legislative work. At the end of the day, the two chambers, last Thursday passed the revised 2020 Appropriation Bill.
At Senate plenary, the revised 2020 budget figure for the fiscal year was jerked up by N301 billion to make it N10.810 trillion. The N301 billion added to the earlier proposal made by the executive came from increases in capital expenditure proposal, which was upped from N2.230 trillion to N2.488 trillion; recurrent expenditure rose from the earlier proposed N4.928 trillion to N4.942 trillion and statutory transfers increased from N398.505 billion to N428.033 billion.
The upper legislative chamber also reviewed parameters assumptions of the revised proposals like $25 per barrel oil price benchmark increased to $28 per barrel; 1.9m barrel oil production per day target reduced to 1.8 million barrel per day while budget deficit rose from N2.28 trillion to N4.17 trillion.
Other highlights of the revised budget proposal forwarded to the Senate by Buhari penultimate week, including N2.951trillion debt servicing and N500 billion as intervention fund for COVID-19 were retained. Also, the N360 to a $1 exchange rate was retained.
Shedding more light on the increases, Chairman of the Senate Committee on Finance, Senator Olamilekan Adeola, said increases made on oil price benchmark from $25 per barrel proposed to $28 per barrel, accounted for N5 billion spread on different votes earlier proposed.
According to him, out of the N5 billion expected as additional proceeds from increased oil price benchmark, N1.746 billion was added to the statutory votes of N44.2 billion for the Niger Delta Development Commission (NDDC) and N816 million added to N20.944 billion earlier proposed for the North East Development Commission (NEDC).
Other increases included N1.709 billion added to the earlier votes of N51.120 billion of the Universal Basic Education Commission (UBEC) and N897 million added to the N25.560 billion earlier proposed for Basic Health Care Fund.
In his lead debate for the passage of the revised budget, Chairman of the Senate Committee on Appropriation, Senator Jibrin Barau, said his committee, while analysing the budget proposals observed that there were cuts in all items in statutory transfers, increase in the debt service and general reduction in the overhead component of the budget (excluding the health sector).
Others are reductions/zero provision to some projects in the capital component and new provisions on service-wide votes and capital supplementation to cushion the socio-economic disruptions and shock of Covid-19 pandemic.
Speaking after the passage of the budget, Lawan said the various standing committees of the Senate should through the power of oversight, ensure the implementation of all appropriations made as passed.
“We must ensure accountability in the execution of the just passed revised 2020 budget in the interest of Nigerians. The best way of doing this is to carry out thorough oversight on both the revenue generating agencies and others executing the budget in one way or the other,” he said.
In the House of Representatives, the lawmakers had last Tuesday passed the revised 2020 budget, increasing the sum sent to it by President Muhammadu Buhari from N10.59 trillion to N10.805 trillion.
The budget was passed at plenary after clause-by-clause consideration of the report submitted by the Chairman of the House Committee on Appropriation, Hon. Mukhtar Betara.
Considering the budget, the House members included N4billion vote to address the hazards and welfares of National Association of Resident Doctors (NARD), who are threatening to embark on strike, thereby increasing the figure submitted to the House by the Committee.
The House also approved the request made by President Buhari for the federal government to obtain external loans totaling $5.513billion to finance budget deficits.
During the consideration of the budget, Chairman of the Committee on Appropriation, Muktar Betara, said the increase in the revised budget was for interventions to cushion the effects of the Covid-19 pandemic on the country.
The legislation entitled, “A Bill for an Act to amend the Appropriation Act, 2020 to authorise the issue from the Consolidated Revenue Fund of the Federation the total sum of N10,801,544,664,642 (raised by N4,000,000,000)”, the budget allocated N422.77billion for Statutory Transfers and N2.951 trillion for Debt Service.
Also, the sum N4.938 trillion is allocated to Recurrent (Non-Debt) Expenditure while the sum of N2.488 trillion is for contribution to the Development Fund for Capital Expenditure.
The Public Complaints Commission took N4.700 billion, Independent National Electoral Commission (INEC) N36 billion, National Human Right Commission N2.250 billion, North East Development Commission N20.944 billion while Basic Health Care Fund got N25.560 billion.
For statutory transfers, the National Judicial Council took N110 billion, Niger-Delta Development Commission N44.200 billion, Universal Basic Education N51.120 billion and National Assembly gulped N128 billion
Out of the N2.951trillion allocation for debt service, Domestic Debts got N1. 873 trillion, Foreign Debts took N805. 470 billion and Sinking Fund to Retire Maturing Loans is allocated N272. 900 billion.
At the House plenary last Thursday, the Green Chamber also increased the revised budget by N5.256 billion bringing the budget size to N10.810 trillion as against the N10.805 trillion passed on Wednesday.
Chairman of the House committee on Finance, Hon. James Faleke moved a motion for the amendment of the national budget size and statutory transfers, and was seconded by Hon. Abubakar Yalleman.
He observed that the application of the percentage of the $3 per barrel as share of Revenue amounting to N5,256,207,430 to some Statutory Agencies was erroneously omitted in the recently passed budget.
The House therefore increased the statutory transfer from N422.775 billion to a new figure of N428.032 billion.
It increased the statutory transfer to the Niger Delta Development (NDDC) by N1.746 billion representing 15% NDDC States share Federation Account and raised that of the North Development Commission (NEDC) by N816.871 million representing 10% of North–East States of FAAC.
Similarly, the statutory transfer to the Universal Basic Education Commission (UBEC) was increased by N1.795 billion (2% of CRF); Basic Health Care Fund is increased by N897. 641 (1% of CRF).
These resolutions followed the adoption of a motion on amendment of Budget Size and Statutory Transfers, sponsored by the Chairman of Committee on Appropriation, Hon Muktar Betara.
Betara noted the constitutional requirements of share of Incremental Revenue by Statutory Agencies from the $3 per barrel oil benchmark price increase. He also noted the approved increase in the crude oil benchmark price from $25 to $28 per barrel.
According to the approved budget, be it enacted by the National Assembly as follows: ‘’All amounts appropriated under this Act shall be released from the Consolidated Revenue Fund of the Federation only for the purpose specified in the Schedule to this Act.
‘’In the event that the implementation of any of the projects intended to be undertaken under this Act cannot be completed without virement, such virement shall only be effected with the prior approval of the National Assembly.
‘’Any error in the schedule to this Act that may hinder the implementation of projects and programmes in Ministries, Departments and Agencies may be corrected through a corrigendum issued by the National Assembly, provided that the total sum for the project or programme is not affected.
‘’The Accountant-General of the Federation shall immediately upon the coming into force of this Bill maintain a separate record for the documentation of Revenue accruing to the Consolidated Revenue Fund in excess of oil price benchmark adopted in this Budget
(ii)Such revenues as specified in Sub-section (1) of this section refers to Revenues accruing from sales of government crude oil in excess of the approved benchmark price per barrel, the Petroleum Profit Tax and Royalty on Oil and Gas.
‘’No funds shall be paid out of the monies arising from the record specified in Section 5 (1) except by an Act/approval of the National Assembly.
The Accountant-General of the Federation shall forward to the National Assembly full details of funds released to the government Agencies immediately such funds are released.
‘’The Minister of Finance shall ensure that funds appropriated under this Act are released to the appropriate agencies and or organs of government as and when due, provided that no funds for any quarter of the fiscal year shall be deferred without prior waiver from the National Assembly.’
‘’The department of government charged with the responsibility of certifying that due processes have been complied with in the processing of implementation of projects shall ensure that all processes of approval are completed within the specified period as provided for in the Public Procurement Act.
‘’All Accounting Officers of Ministries, Parastatals and Departments of Government, who control heads of expenditures shall upon the coming into effect of this Bill furnish the National Assembly on quarterly basis with detailed information on; the Internally Generated Revenue of the agency in any form; and all foreign and domestic assistance received from any agency, person or organisation in any form.
‘’The Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligent Unit (NFIU) are authorised to change and defray from all monies standing in credit to the units as revenues or penalties or sanctions at 10% for technical setup and operational cost at the units in this financial year.
‘’The detailed estimates of expenditure are set out in the Second Schedule to this Bill. In line with the provisions of section 318 of the Constitution of the Federal Republic of Nigeria, this Bill expires after 12 months, starting from 1st day of January to 31st day of December, 2020 when assented to.’’
Thus, with the passage of the revised 2020 N10.81 trillion by the National Assembly and possible transmission to the Executive arm of government for President Buhari’s possible assent, the two chambers of the National Assembly should closely monitor the implementation of the revised budget.
This, they can do through the oversight functions of the standing committees of both the Senate and the House of Representatives with a view to ensuring that the Appropriation Act is implemented to the letter.